Goldfinch Partners acquires payments fintech Vesta
Goldfinch Partners, a Washington-based private equity firm, has invested $125 million in Vesta in a bid to take control of more than 80% of the Oregon-based payments and fraud detection solution provider.
CEO Ron Hynes told Barron’s that around 100 investors are exiting, including high net worth individuals, as well as small angel and seed investors.
Hynes says none of these investors held more than an 8% stake. The transaction has been in the works since last October, when the CEO hired FT Partners, a San Francisco-based investment banking firm, to advise on the process.
The transaction, which closed on 18 May, will see the fintech focus on the global deployment of its fraud protection and ecommerce payment solutions. Currently, it serves customers including Shopify, Salesforce, and Vodafone Group.
“Since taking over as CEO in July of last year, I have refocused the company on product development, market expansion and technology enhancements,” says Hynes in a statement.
“This capital infusion from Goldfinch Partners provides us [with] the fuel to accelerate our efforts.” Hynes says a large part of the capital will go towards hiring, marketing and branding efforts.
Vesta offers “zero-risk” and “zero-liability” payment guarantees. It uses a real-time, artificial intelligence (AI)-powered decisioning platform to analyse customers’ online payment transactions to assess the risk of fraud.
The fintech’s private equity investor and acquirer Goldfinch is headed up by Sean Collins, former founder and chief investment officer at BCG Digital, and Bill McNichols, ex-senior vice president at Starbucks.
Vesta marks Goldfinch’s third transaction, following an investment in cryptocurrency start-up Bakkt earlier this year and Catalan Technologies in 2019. With no fund, Goldfinch has completed all three transactions as an independent sponsor, raising money on a deal-by-deal basis.
“In a world where customers can’t use cash to pay for goods in stores, [Vesta’s] value proposition gets accentuated,” Collins told Barron’s.
McNichols added that the acquisition took five weeks longer than planned due to the coronavirus, and that “it was hard to raise both debt and equity capital” in the current climate.
Founded in 1995, this will be the first time Vesta is owned by private equity.